Least cost supply-side options for mitigating greenhouse gas and other harmful emissions from the power sector: Sri Lanka case study

Abstract

Sri Lanka is predominantly a fossil fuel-importing country with relatively high rainfall mainly in the central hilly region. This factor has led to its heavy dependence on hydro-power to satisfy its power generation needs during the past century since electricity was first introduced into the country. However, the economic hydro-power resources are limited, as Sri Lanka has already exploited the major component of these economic resources. The long-term least-cost option of power generation has given rise to the installation of approximately 600 MW of oil-fired plants. Further, this planning process will result in the addition of 1800 MW of coal-fired plants within the next 15 years. These thermal plant additions will undoubtedly increase harmful emissions, which at present stand at a relatively low level, from the power sector. This paper analyses various clean coal options and renewable energy technologies as supply-side options for mitigating harmful emissions from the power sector, considering their technical potential and economic feasibility with emphasis on carbon dioxide emissions, given their global warming potential. The sensitivities of the results of the study to different input parameters are also presented in the paper. It is concluded that the least expensive supply-side options for emission reduction in Sri Lanka are the use of renewable energy technologies such as wind power and fuelwood-fired dendrothermal plants. Further, in percentage terms, the incremental cost of these reductions is only half the value of the emission reductions achieved.